November 23, 2013

Linda Woodford spent the last 15 years of her career
inserting phony numbers in the U.S. Department of Defense's accounts.

Every month until she
retired in 2011, she says, the day came when the Navy would start
dumping numbers on the Cleveland, Ohio, office of the Defense Finance
and Accounting Service, the Pentagon's main accounting agency. Using the
data they received, Woodford and her fellow DFAS accountants there set
about preparing monthly reports to square the Navy's books with the U.S.
Treasury's - a balancing-the-checkbook maneuver required of all the
military services and other Pentagon agencies.

And
every month, they encountered the same problem. Numbers were missing.
Numbers were clearly wrong. Numbers came with no explanation of how the
money had been spent or which congressional appropriation it came from.

"A lot of times there were issues of numbers being inaccurate," Woodford
says. "We didn't have the detail … for a lot of it."

The
data flooded in just two days before deadline. As the clock ticked
down, Woodford says, staff were able to resolve a lot of the false
entries through hurried calls and emails to Navy personnel, but many
mystery numbers remained. For those, Woodford and her colleagues were
told by superiors to take "unsubstantiated change actions" - in other
words, enter false numbers, commonly called "plugs," to make the Navy's
totals match the Treasury's.

Jeff
Yokel, who spent 17 years in senior positions in DFAS's Cleveland
office before retiring in 2009, says supervisors were required to
approve every "plug" - thousands a month.

"If the amounts didn't
balance, Treasury would hit it back to you," he says.

After
the monthly reports were sent to the Treasury, the accountants
continued to seek accurate information to correct the entries. In some
instances, they succeeded. In others, they didn't, and the unresolved
numbers stood on the books.

STANDARD PROCEDURE

At
the DFAS offices that handle accounting for the Army, Navy, Air Force
and other defense agencies, fudging the accounts with false entries is
standard operating procedure, Reuters has found. And plugging isn't
confined to DFAS (pronounced DEE-fass). Former military service
officials say record-keeping at the operational level throughout the
services is rife with made-up numbers to cover lost or missing
information.

A review of
multiple reports from oversight agencies in recent years shows that the
Pentagon also has systematically ignored warnings about its accounting
practices. "These types of adjustments, made without supporting
documentation … can mask much larger problems in the original accounting
data," the Government Accountability Office, the investigative arm of
Congress, said in a December 2011 report.

Plugs
also are symptomatic of one very large problem: the Pentagon's chronic
failure to keep track of its money - how much it has, how much it pays
out and how much is wasted or stolen.

This
is the second installment in a series in which Reuters delves into the
Defense Department's inability to account for itself. The first article
examined how the Pentagon's record-keeping dysfunction results in
widespread pay errors that inflict financial hardship on soldiers and
sap morale. This account is based on interviews with scores of current
and former Defense Department officials, as well as Reuters analyses of
Pentagon logistics practices, bookkeeping methods, court cases and
reports by federal agencies.

As
the use of plugs indicates, pay errors are only a small part of the
sums that annually disappear into the vast bureaucracy that manages more
than half of all annual government outlays approved by Congress. The
Defense Department's 2012 budget totaled $565.8 billion, more than the
annual defense budgets of the 10 next largest military spenders
combined, including Russia and China. How much of that money is spent as intended is impossible to determine.

In
its investigation, Reuters has found that the Pentagon is largely
incapable of keeping track of its vast stores of weapons, ammunition and
other supplies; thus it continues to spend money on new supplies it
doesn't need and on storing others long out of date. It has amassed a
backlog of more than half a trillion dollars in unaudited contracts with
outside vendors; how much of that money paid for actual goods and
services delivered isn't known. And it repeatedly falls prey to fraud
and theft that can go undiscovered for years, often eventually detected
by external law enforcement agencies.

The
consequences aren't only financial; bad bookkeeping can affect the
nation's defense. In one example of many, the Army lost track of $5.8
billion of supplies between 2003 and 2011 as it shuffled equipment
between reserve and regular units. Affected units "may experience
equipment shortages that could hinder their ability to train soldiers
and respond to emergencies," the Pentagon inspector general said in a
September 2012 report.

Because
of its persistent inability to tally its accounts, the Pentagon is the
only federal agency that has not complied with a law that requires
annual audits of all government departments. That means that the $8.5
trillion in taxpayer money doled out by Congress to the Pentagon since
1996, the first year it was supposed to be audited, has never been
accounted for. That sum exceeds the value of China's economic output
last year.

Congress in
2009 passed a law requiring that the Defense Department be audit-ready
by 2017.
Then-Defense Secretary Leon Panetta in 2011 tightened the
screws when ordered that the department make a key part of its books
audit-ready in 2014.

Reuters
has found that the Pentagon probably won't meet its deadlines. The main reason is rooted in the
Pentagon's continuing reliance on a tangle of thousands of disparate,
obsolete, largely incompatible accounting and business-management
systems. Many of these systems were built in the 1970s and use outmoded
computer languages such as COBOL on old mainframes. They use antiquated
file systems that make it difficult or impossible to search for data.
Much of their data is corrupted and erroneous.

"It's
like if every electrical socket in the Pentagon had a different shape
and voltage," says a former defense official who until recently led
efforts to modernize defense accounting.

"AMALGAM OF FIEFDOMS"

No one can even agree on how many of these accounting and business systems are in use. The Pentagon itself puts the number at 2,200 spread
throughout the military services and other defense agencies. A January
2012 report by a task force of the Defense Business Board, an advisory
group of business leaders appointed by the secretary of defense, put the
number at around 5,000.
"There
are thousands and thousands of systems," former Deputy Secretary of
Defense Gordon England said in an interview. "I'm not sure anybody knows
how many systems there are."

In a May 2011 speech, then-Secretary of Defense Robert Gates described the Pentagon's business
operations as "an amalgam of fiefdoms without centralized mechanisms to
allocate resources, track expenditures, and measure results. ... My
staff and I learned that it was nearly impossible to get accurate
information and answers to questions such as ‘How much money did you
spend' and ‘How many people do you have?' "

The
Pentagon has spent tens of billions of dollars to upgrade to new, more
efficient technology in order to become audit-ready. But many of these
new systems have failed, either unable to perform all the jobs they were
meant to do or scrapped altogether - only adding to the waste they were
meant to stop.

Mired in a
mess largely of its own making, the Pentagon is left to make do with
old technology and plugs - lots of them. In the Cleveland DFAS office
where Woodford worked, for example, "unsupported adjustments" to "make
balances agree" totaled $1.03 billion in 2010 alone, according to a
December 2011 GAO report.

In
its annual report of department-wide finances for 2012, the Pentagon
reported $9.22 billion in "reconciling amounts" to make its own numbers
match the Treasury's, up from $7.41 billion a year earlier. It said that
$585.6 million of the 2012 figure was attributable to missing records.
The remaining $8 billion-plus represented what Pentagon officials say
are legitimate discrepancies. However, a source with knowledge of the
Pentagon's accounting processes said that because the report and others
like it aren't audited, they may conceal large amounts of additional
plugs and other accounting problems.

The
secretary of defense's office and the heads of the military and DFAS
have for years knowingly signed off on false entries. "I don't think
they're lying and cheating and stealing necessarily, but it's not the
right thing to do," Pentagon Comptroller Robert Hale said in an
interview. "We've got to fix the processes so we don't have to do that."

Congress
has been much more lenient on the Defense Department than on publicly
traded corporations. The Sarbanes-Oxley Act of 2002, a response to the
Enron Corp and other turn-of-the-century accounting scandals, imposes
criminal penalties on corporate managers who certify false financial
reports.

"The concept of Sarbanes-Oxley is completely foreign" to the
Pentagon, says Mike Young, a former Air Force logistics officer who for
years has been a consultant on, and written about, Defense Department
logistics.

Defense
officials point out that most plugs represent pending transactions -
like checks waiting to clear with a bank - and other legitimate
maneuvers, many of which are eventually resolved. The dollar amounts,
too, don't necessarily represent actual money lost, but multiple
accounting entries for money in and money out, often duplicated across
several ledgers. That's how, for example, a single DFAS office in
Columbus, Ohio, made at least $1.59 trillion - yes, trillion - in
errors, including $538 billion in plugs, in financial reports for the
Air Force in 2009, according to a December 2011 Pentagon inspector
general report. Those amounts far exceeded the Air Force's total budget
for that year.

Defense Secretary Chuck Hagel declined to comment for this article. In an August 2013 video
message to the entire Defense Department, he said:

"The Department of
Defense is the only federal agency that has not produced audit-ready
financial statements, which are required by law. That's unacceptable."

DFAS Director Teresa McKay declined to be interviewed for this article.

In
an email response to questions from Reuters, a Treasury spokesman said:

"The Department of Defense is continuing to take steps to strengthen
its financial reporting. ... We're supportive of those efforts and will
continue to work with DOD as they make additional progress."

While the
Treasury knowingly accepts false entries, it rejects accounts containing
blank spaces for unknown numbers and totals that don't match its own.

Senators
Tom Coburn, an Oklahoma Republican, and Joe Manchin, a West Virginia
Democrat, introduced legislation earlier this year that would penalize
the Pentagon if it isn't audit-ready by 2017. Under the proposed Audit
the Pentagon Act of 2013, failure to meet the deadline will result in
restrictions on funding for new acquisition programs, prohibit purchases
of any information-technology systems that would take more than three
years to install, and transfer all DFAS functions to the Treasury.

"The
Pentagon can't manage what it can't measure, and Congress can't
effectively perform its constitutional oversight role if it doesn't know
how the Pentagon is spending taxpayer dollars," Coburn said in an email
response to questions. "Until the Pentagon produces a viable financial
audit, it won't be able to effectively prioritize its spending, and it
will continue to violate the Constitution and put our national security
at risk."TOO MUCH STUFF

The
practical impact of the Pentagon's accounting dysfunction is evident at
the Defense Logistics Agency, which buys, stores and ships much of the
Defense Department's supplies - everything from airplane parts to
zippers for uniforms.

It has way too much stuff.

"We
have about $14 billion of inventory for lots of reasons, and probably
half of that is excess to what we need," Navy Vice Admiral Mark
Harnitchek, the director of the DLA, said at an August 7, 2013, meeting
with aviation industry executives, as reported on the agency's web site.

And
the DLA keeps buying more of what it already has too much of. A
document the Pentagon supplied to Congress shows that as of September
30, 2012, the DLA and the military services had $733 million worth of
supplies and equipment on order that was already stocked in excess
amounts on warehouse shelves. That figure was up 21% from $609 million a
year earlier. The Defense Department defines "excess inventory" as
anything more than a three-year supply.

Consider
the "vehicular control arm," part of the front suspension on the
military's ubiquitous High Mobility Multipurpose Vehicles, or Humvees.
As of November 2008, the DLA had 15,000 of the parts in stock, equal to a
14-year supply, according to an April 2013 Pentagon inspector general's
report.

And yet, from
2010 through 2012, the agency bought 7,437 more of them - at prices
considerably higher than it paid for the thousands sitting on its
shelves. The DLA was making the new purchases as demand plunged by
nearly half with the winding down of the Iraq and Afghanistan
wars. The inspector general's report said the DLA's buyers hadn't
checked current inventory when they signed a contract to acquire more.

Just
outside Harrisburg, Pennsylvania, the DLA operates its Eastern
Distribution Center, the Defense Department's biggest storage facility.
In one of its warehouses, millions of small replacement parts for
military equipment and other supplies are stored in hundreds of
thousands of breadbox-size bins, stacked floor to ceiling on metal
shelves in the 1.7 million-square-foot building.

Sonya
Gish, director of the DLA's process and planning directorate, works at
the complex. She says no system tracks whether newly received items are
put in the correct bins, and she confirmed that because of the vast
quantities of material stored, comprehensive inventories are impossible.
The DLA makes do with intermittent sampling to see if items are missing
or stored in the wrong place. Gish also says the distribution center
does not attempt to track or estimate losses from employee theft.

The
Pentagon in 2004 ordered the entire Defense Department to adopt a
modern labeling system that would allow all the military branches to see
quickly and accurately what supplies are on hand at the DLA and each of
the services. To date, the DLA has ignored the directive to use the
system. William Budden, deputy director of distribution, said in an
interview that the cost would have exceeded the potential benefits, and
that the DLA's existing systems are adequate.

A
"Clean Out the Attic" program to jettison obsolete inventory is making
progress, DLA Director Harnitchek said in an interview. But the effort
is hindered because the lack of reliable information on what's in
storage makes it hard to figure out what can be thrown out.

The
DLA also has run into resistance among warehouse supervisors who for
years have been in charge of a handful of warehouse aisles and jealously
husband their inventory.

"I believe that the biggest challenge is
helping item managers identify things we have in our warehouses that
they can just let go of," Budden said in an interview published in an
undated in-house DLA magazine.

OLD AND DANGEROUS

A
few miles away, amid the gently rolling hills of south central
Pennsylvania, a series of 14 explosions interrupt the stillness of a
spring afternoon, shooting fountains of dirt more than 100 feet into the
air. Staff at the Letterkenny Army Depot - one of eight Army Joint
Munitions Command depots in the United States - are disposing of 480
pounds of C4 plastic explosive manufactured in 1979 and at risk of
becoming dangerously unstable.

If
Woody Pike could have his way, the soldiers would be destroying a lot
more of the old, unused munitions stored in scores of turf-covered
concrete "igloos" ranged across the Letterkenny compound.

There
are runway flares from the 1940s, and warheads for Sparrow missiles
that the military hasn't fielded since the 1990s. Most irksome, because
they take up a lot of space, are rocket-launch systems that were retired
in the 1980s.

"It will be years before they're gone," says Pike, a
logistics management specialist and planner at Letterkenny.

More
than one-third of the weapons and munitions the Joint Munitions Command
stores at Letterkenny and its other depots are obsolete, according to
Stephen Abney, command spokesman. Keeping all those useless bullets,
explosives, missiles, rifles, rocket launchers and other munitions costs
tens of millions of dollars a year.

The
munitions sit, year after year, because in the short term, "it's
cheaper for the military to store it than to get rid of it," said Keith
Byers, Letterkenny's ammunition manager.

"What's counterproductive is
that what you're looking at is stocks that are going to be destroyed eventually anyway."

Also,
an Army spokesman said, the Pentagon requires the Army to store
munitions reserves free of charge for the other military services, which
thus have no incentive to pay for destroying useless stock.

To
access ammunition and other inventory still in use, depot staff often
must move old explosives, much of which is stored in flimsy,
thin-slatted crates. "Continuing to store unneeded ammunition creates
potential safety, security and environmental concerns," Brigadier
General Gustave Perna said in a 2012 military logistics newsletter, when
he was in charge of the Joint Munitions Command. The cost and danger of
storing old munitions "frustrates me as a taxpayer," he said. Perna
declined requests for an interview.

Sometimes
the danger leads to action, as when the C4 was detonated. And the depot
recently received funding to destroy 15,000 recoilless rifles last used
during World War II, Pike says.

Yet,
on the day of the C4 blasts, piles of Phoenix air-to-air missiles -
used on Navy F-14 fighter jets that last flew for the U.S. in 2006 - had
just been offloaded from rail cars and were waiting to be put into
storage.

In 2010, as part
of the Defense Department's modernization effort , the Joint Munitions
Command scrapped a computer system that kept track of inventory and
automatically generated required shipping documents. It was replaced
with one that Pike says doesn't do either.

His
staff now must guess how much inventory and space Letterkenny has. The
Army built at additional cost a second system to create shipping
documents and an interface between the two systems.

"We're having
problems with the interface," Pike says.

COSTLY REPAIRS

Media
reports of Defense Department waste tend to focus on outrageous line
items: $604 toilet seats for the Navy, $7,600 coffee makers for the Air
Force. These headline-grabbing outliers amount to little next to the
billions the Pentagon has spent on repeated efforts to fix its
bookkeeping, with little to show for it.

The
Air Force's Expeditionary Combat Support System was intended to provide
for the first time a single system to oversee transportation, supplies,
maintenance and acquisitions, replacing scores of costly legacy
systems. Work got under way in 2005. Delays and costs mounted. In late
2012, the Air Force conducted a test run. The data that poured out was
mostly gibberish. The Air Force killed the project.

The
system "has cost $1.03 billion … and has not yielded any significant
military capability," the Air Force said in a November 2012
announcement.

Fixing the
system would cost an additional $1.1 billion, it said, and even then, it
would do only about a quarter of the tasks originally intended, and not
until 2020.

The Air Force blamed the failure on the main contractor, Virginia-based Computer Sciences Corp, saying the company was unable to handle the job.

Computer
Sciences spokesman Marcel Goldstein said that the company provided the
Air Force with important "capabilities," and that "the progress we made,
jointly with the Air Force, and the software we have delivered could be the foundation for the next effort to develop and deploy a logistics system for the Air Force."

David
Scott Norton, an expert in accounting systems who worked for CSC on the
Air Force contract, said the project employed too many people, making
coordination and efficiency impossible.

"There were probably thousands
of people, both Air Force and contractors, on it," he says.

High
turnover among both Air Force and contractor staff hurt, too, he says;
many of the people who worked on it weren't the people who had conceived
and designed it.

More
than $1 billion was wasted when the Pentagon in 2010 ditched the Defense
Integrated Military Human Resources System, launched in 2003 as a
single, department-wide pay and personnel system that would eliminate
pay errors. Interagency squabbles and demands for thousands of changes
eventually sank it.

The
Air Force's Defense Enterprise Accounting and Management System was
supposed to take over the Air Force's basic accounting functions in
2010. To date, $466 million has been spent on DEAMS, with a projected
total cost of $1.77 billion to build and operate it, an Air Force
spokeswoman said. The system lacks "critical functional capabilities,"
and its "data lacks validity and reliability," according to a September
2012 Defense Department inspector general report. It now isn't expected
to be fully operational until 2017.

The
Army's General Fund Enterprise Business System is often held up as an
example of rare success. Up and running in 2012, GFEBS is now used in
Army posts all over the world to handle basic accounting functions.

Some
things it does well, but the inspector general said in March last year
that the system didn't provide department management with required
information and may not resolve "longstanding weaknesses" in the Army's
financial management, "despite costing the Army $630.4 million as of
October 2011."

In 2000,
the Navy began work on four separate projects to handle finances,
supplies, maintenance of equipment and contracting. Instead, the systems
took on overlapping duties that each performed in different ways, using
different formats for the same data. Five years later, the GAO said:
"These efforts were failures. ... $1 billion was largely wasted."

The
Navy started again in 2004 with the Navy Enterprise Resources Planning
project to handle all Navy accounting - at first. The Navy later decided
on a system design that would cover only about half of the service's
budget because a single, service-wide system would be too difficult and
time-consuming, according to former Navy personnel who worked on the
project. Accounting for property and other physical assets was dropped,
too.

Now in use, the Navy
ERP relies on data fed to it from 44 old systems it was meant to
replace. "Navy officials spent $870 million ... and still did not
correct" the system's inability to account for $416 billion in
equipment, the Pentagon inspector general said in a July 2013 report.

The Navy declined to comment.

Even
an effort to coordinate all these projects ended in failure. In 2006,
Deputy Secretary of Defense Gordon England established the Business
Transformation Agency to force the military branches and other agencies
to upgrade their business operations, adhere to common standards and
make the department audit-ready.

Three
years later, the Center for Strategic and International Studies said
that while the Defense Department was spending "in excess of $10 billion
per year on business systems modernization and maintenance, (o)verall
the result is close to business as usual."

Defense
Secretary Gates shut it down in 2011 - after the Pentagon had spent
$700 million on it. England declined to comment on the episode.

Former
BTA officials blamed the failure on their lack of authority to enforce
their decisions and resistance from the individual services.

CONTRACT HITS

Over
the past 10 years, the Defense Department has signed contracts for the
provision of more than $3 trillion in goods and services. How much of
that money is wasted in overpayments to contractors, or was never spent
and never remitted to the Treasury, is a mystery. That's because of a
massive backlog of "closeouts" - audits meant to ensure that a contract
was fulfilled and the money ended up in the right place.

The
Defense Contract Management Agency handles audits of fixed-price
contracts, which are relatively problem-free. It's the Defense Contract
Audit Agency that handles closeouts for department-wide contracts that
pay the company or individual for expenses incurred. At the end of
fiscal 2011, the agency's backlog totaled 24,722 contracts worth $573.3
billion, according to DCAA figures. Some of them date as far back as
1996.

The individual
military services close out their own contracts, and the backlogs have
piled up there, too. The Army's backlog was 450,000 contracts, the GAO
said in a December 2012 report. The Navy and Air Force did not have
estimates of their backlogs.

Timely closeouts also reduce the government's
financial risk by avoiding interest on late payments to contractors.

To
trim its backlog, the DCAA last year raised to $250 million from $15
million the threshold value at which a contract is automatically
audited. DCAA says that by concentrating its auditors on the biggest
contracts, it will recoup the largest sums of money, and that it will
conduct selective audits of smaller contracts, based on perceived risk
and other factors. Still, hundreds of thousands of contracts that would
eventually have been audited now won't be.

"Having
billions of dollars of open, unaudited contracts stretching back to the
1990s is clearly unacceptable, and places taxpayer dollars at risk of
misuse and mismanagement," Senator Thomas Carper, a Delaware Democrat
and chairman of the Homeland Security and Governmental Affairs
Committee, said in an email response to questions. "We must make sure
that the Department of Defense is actively assessing risks and making
sure that contractors who fall underneath the threshold remain
accountable for their work."

Spotty
monitoring of contracts is one reason Pentagon personnel and
contractors are able to siphon off taxpayer dollars through fraud and
theft - amounting to billions of dollars in losses, according to
numerous GAO reports. In many cases, Reuters found, the perpetrators
were caught only after outside law-enforcement agencies stumbled onto
them, or outsiders brought them to the attention of prosecutors.

In
May this year, Ralph Mariano, who worked as a civilian Navy employee
for 38 years, pleaded guilty in federal court in Rhode Island to charges
of conspiracy and theft of government funds related to a kickback
scheme that cost the Navy $18 million from 1996 to 2011. Mariano was
sentenced November 1 to 10 years in prison and fined $18 million.

Mariano
admitted that as an engineer at the Naval Undersea Warfare Center in
Newport, Rhode Island, he added money to contracts held by Advanced
Solutions for Tomorrow. The Georgia-based company then paid kickbacks to
Mariano and others, including friends and relatives.

Mariano
was charged more than five years after the allegations against him
first emerged in a 2006 civil whistleblower lawsuit in federal court in
Georgia that had been kept under seal. Court documents suggest one
reason why the conspiracy went undetected for so long: The Navy not only
gave Mariano authority to award money to contractors; it also put him
in charge of confirming that the contractors did the work. The Navy
never audited any of the contracts until after Mariano was arrested, a
Navy spokeswoman confirmed.

On
the opposite side of the country, federal prosecutors in San Diego,
California, in 2009 accused Gary Alexander, a Navy civilian employee, of
arranging with subcontractors to have them bill the Defense Department
for services never performed and then pay him kickbacks from money the
subcontractors received. Alexander masterminded the scheme while he was
head of the Air Surveillance and Reconnaissance Branch of the Navy's
Space and Naval Warfare Systems Center, based in San Diego.

Alexander
in 2010 pleaded guilty to defrauding the Navy and filing false tax
returns. He was sentenced to 75 months in prison and was required to pay
restitution and forfeitures totaling more than $500,000.

Robert
Ciaffa, a federal prosecutor assigned to the case, said the bills were
easily padded because DFAS didn't require detailed invoices. The case
came to light, he said, only after "a woman friend" of one of
Alexander's associates went to prosecutors in 2008 with information
about the fraud.

A Navy
spokeswoman said that Navy Secretary Ray Mabus has taken steps to avert
such fraud, including creating a contract review board, requiring closer
oversight of employees who manage contracts and establishing antifraud
units within Navy contracting services.

Ciaffa
said the Alexander case prompted his office in 2009 to set up a
toll-free fraud tip line that has so far have yielded at least six
cases. One led to guilty pleas in March 2012 by four civilian employees
of the North Island Naval Air Station, near San Diego, after they were
accused of receiving $1 million in kickbacks from contractors.

PLUGGING ALONG

In its 2007 audit-readiness plan, the Defense Department called on DFAS to eliminate plugs by June 2008. That hasn't happened.

In
its financial report for 2012, the Army said each month it "adjusts its
Fund Balance With Treasury to agree with the U.S. Treasury accounts."
In its 2012 annual report, the Defense Logistics Agency said it does the
same. "On a monthly basis, DLA's (Fund Balance With Treasury) is
adjusted to agree with the U.S. Treasury accounts."

The
Navy, in a footnote in its 2012 financial report, "acknowledges that it
has a material internal control weakness in that it does not reconcile
its" numbers with the Treasury's. The footnote said the Navy inserts
inaccurate numbers in its monthly reports so that they agree with the
Treasury's. It said it is working with DFAS to try to eliminate the
problems.

The Treasury says it
requires the monthly reports from Pentagon agencies to ensure that it is
"providing accurate financial information to Congress and the general
public." The reports verify that the military is using money for its
intended purposes; spending money on things other than what it was
appropriated for is, with rare exceptions, a violation of the
Antideficiency Act, which forbids anyone but Congress to appropriate
money. The law carries penalties for individuals involved in violating
it.

Because of the lack of accurate
accounting, a 2012 GAO report said, "the Department of the Navy is at
increased risk of Antideficiency Act violations."

Without a functioning, unified bookkeeping system, the Pentagon's accountants have no option but to continue taking that risk.

Woodford,
the former accountant in DFAS's Cleveland office, says that in the
frenzy to complete the Navy's monthly financial reports to the Treasury,
much of the blame rested with the "old antiquated systems" the Pentagon
used. A common reason for inserting plugs was that "you knew what the
numbers were, but you didn't have the supporting documents."

The
Navy data, pouring in through dozens of jury-rigged pipelines into
similarly disparate systems, required many "manual workarounds" - typing
data from one system into another, which only added to the potential
for errors.

"They do so much manual
work, it's just ridiculous," says Toni Medley, who retired five years
ago after 30 years doing an assortment of jobs at the same DFAS office.
It's tedious work, she says, and the people doing it "make a lot of
mistakes."

The Navy declined to comment.

Yokel,
the retired official at the DFAS Cleveland office, worked as a
consultant on the Navy Enterprise Resource Planning project, the new
accounting system that fell short of expectations. He says that in
recent years, the new system has managed to reduce the number of plugs,
though they still can add up to a lot in dollar terms. And nearly half
the Navy's budget isn't covered by the system.

The New World Order Plan is spiritually based: it is a conflict between God and His forces, on the one hand, and Satan and his demonic forces on the other side. Anyone who does not know Biblical doctrine about God and Satan, and who does not know Scriptural prophecy, cannot comprehend the nature of the struggle facing the world today. - David Bay, Cutting Edge Ministries

For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places. - Ephesians 6:12

For we are opposed around the world by a monolithic and ruthless conspiracy that relies on covert means for expanding its sphere of influence... Its preparations are concealed, not published. Its mistakes are buried, not headlined. Its dissenters are silenced, not praised. No expenditure is questioned, no rumor is printed, no secret is revealed. - President John F. Kennedy, April 27, 1961

The Bible

Protocols of the Learned Elders of Zion

The book in which they are embodied was first published in the year 1897 by Philip Stepanov for private circulation among his intimate friends. The first time Nilus published them was in 1901 in a book called The Great Within the Small and reprinted in 1905. A copy of this is in the British Museum bearing the date of its reception, August 10, 1906. All copies that were known to exist in Russia were destroyed in the Kerensky regime, and under his successors the possession of a copy by anyone in Soviet land was a crime sufficient to ensure the owner's of being shot on sight. The fact is in itself sufficient proof of the genuineness of the Protocols. The Jewish journals, of course, say that they are a forgery, leaving it to be understood that Professor Nilus, who embodied them in a work of his own, had concocted them for his own purposes.

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